This report projects the outlook of the economy and the Australian Government’s budget to 2062-63. Its analysis and projections of the key drivers of economic growth will help inform and improve public policy settings to better position Australia for the next 40 years.

The report considers five major forces affecting the coming decades:

• population ageing
• technological and digital transformation
• climate change and the net zero transformation
• rising demand for care and support services
• geopolitical risk and fragmentation.

Key highlights:

• The economy is projected to be around two and a half times larger and real incomes around 50 per cent higher by 2062–63.
• Australia’s population is projected to grow more slowly over the next 40 years – at an average of 1.1 per cent a year, compared to 1.4 per cent over the past 40 years.
• Australia’s population will continue to age over the next 40 years. The number of Australians aged 65 and over will more than double and the number aged 85 and over will more than triple.
• More people are participating in paid work than ever before and the labour force participation rate is near record highs.
• The government is gradually rebuilding fiscal buffers. The budget is in surplus for the first time in 15 years in 2022−23, and gross debt as a share of GDP is projected to decline over the coming decades.